About R2.6 billion in half-year dividends, steady and less acrimonious progress in retrenchment of 3 700 employees from its workforce and a 5% firming up in its refined platinum group metals (PGM) production left Anglo American Platinum’s (Amplats) share price stronger on the JSE yesterday.
Shares in the world’s biggest platinum producer on the JSE climbed up by 3.14% in afternoon trade to R630.15, momentarily reversing its losses 4.51%, 16.41% and 36.62% in the past seven days, 90 days, and year-to-date comparatives, respectively.
This was despite the company reporting an 18% plunge in headline earnings per share for the June interim period to R25.56. The R9.75 per share interim dividend that it declared was also 19% lower compared to the same period a year ago.
But with the company saying yesterday that its restructuring process is “progressing at pace, with statutory employee consultations complete” and the Mortimer Smelter now “on care and maintenance,” investors appeared pleased by the cost savings, said analysts.
This, as the company prepares to become a stand alone entity post the planned demerger from Anglo American.
Amplats said its Amandelbult operation has suffered the biggest impact of its employee-reduction process. The company is laying off 3 700 employees including permanent and fixed-term positions across its South African PGM operations.
“Approximately 75% (of the 3 700) had exited the company by the end of June, 2024 with the remaining 25% expected to leave in the second half of the year,” said Amplats.
Moreover, Amplats has already finalised the review of up to 60% of its company contracting base. This process included termination and renegotiation of vendor and contractor services.
During the half-year period under review, Anglo Platinum achieved R4.7bn of savings. This includes savings of R2.9bn from operating costs and R1.8bn shavings off its stay-in-business capital savings. It viewed this as good progress against its 2024 full-year cost-reduction target of R10bn.
The company is chasing containment of cash operating unit costs to R16 500 – R17 500 per PGM ounce and to lower all-in sustaining cost to below $1 050 (R19 201) per 3E ounce this year.
In the half year to June, Amplats’s operating unit costs amounted to R18 280 per PGM ounce due to lower production while AISC topped $957 per 3E ounce during the same period.
“The company responded decisively to an uncertain macro-economic and a low PGM price cycle by restructuring the business in pursuit of operational excellence, increased-levels of productivity, as well as ensuring cash generation,” said Amplats CEO, Craig Miller.
As at the end of the period under review, Amplats had a net cash position of R14.5bn. About R70m of its R2.6bn for the period will go to the group’s employees via the Thobo employee ownership scheme as well as to its community ownership scheme trusts.
During the interim period, Amplats raised PGM production by 5% to 1.78 million ounces compared to the prior period, while metal-in-concentrate lowered by a similar margin to 1.76 million ounces.
Sales volumes for the period strengthened by 9%. Its earnings before interest, tax, depreciation and amortisation (Ebitda) were 8% lower in the prior year first half.
“The opportunities before us as a stand-alone company are both numerous and exciting. The planned demerger from Anglo American will create a more focused, independent global leader in the PGM industry, with the scale and robust foundations to maximise the potential,” said Miller.
BUSINESS REPORT